Investment Playground.NET

Everyone talks about business plans but I rarely see a lot of follow through. I’m not sure what the disconnect is. Perhaps budding entrepreneurs are intimidated by the big words and sixty page word doc they’re asked to complete. Truth is - business plans are a LOT easier than you realize. For every inkling of an idea you have - start writing and putting together your thoughts. Even if the idea doesn’t surface - your business plan library will prove to make you steady income in the future. This is a three-part series.

Firstly - WHY do we need a business plan? Essentially two fundamental reasons: gain funding and follow a process map. Your Your business plan is your proposal. It contains your million dollar idea, why it’s a million dollar idea, your plan as to how to get there, the constraints along the way, the sustainability of your plan, etc. Why is your idea going to net profit and/or change the world?? Have you ever heard a friend or colleague speak about this great new idea he/she has - but you weren’t very keen on their idea or you felt as if it “wouldn’t work”? That’s where the business plan comes in. A bulletproof document highlighting exactly how this WILL WORK - and how you can get involved! Any investor will get into bed with you as long as they have confidence in your idea. Now money starts trickling in from angel investors, venture capitalists, friends, and family. Beyond being just a general good idea, if you’re looking for loans, banks absolutely require a business plan.

This all is fine and dandy - but the biggest beneficiary of a business plan is YOU. I’ve written a few plans for some great ideas I’ve had, and by the end of the plan I’ve realized all the flaws that I have, and consequently scrapped the idea. You’re writing a strategic process map and figuring out the most detailed action steps to take. You’re building contingency plans into the mix. What happens if Google enters this market, what happens if the neighbor expands his store, what happens if my product spoils, etc. If you can clearly write out every possible step that you’ll need to take - you’re building confidence in your venture and essentially - nothing will stop you.

Strategic process planning is not meant for only global companies - developing your strategy is applicable even in the case of lil Judy’s lemonade stand. She priced her lemonade at fifty cents a pop until Mike from across the street started selling his at thirty cents, and priced her right out of the market. Now Mike started Mike’s Hard Lemonade and Judy is living in a van down by the river. Had Judy built a strategic process plan, she could have limited her costs and built in a higher margin. She would have cornered her distribution strategy and been able to secure a recurring revenue stream from regular customers on ten different corners. She also could have franchised and made Mike’s friends into his own competition. When all else fails, she would have known far in advance how long she can sustain predatory pricing when compared to her competitor. Silly silly Judy.

I’ve digressed. We’ll discuss how to get started in part II. You need to learn everything possible about the market and industry you’re in. Become an expert and roll your sleeves up, digging through information. My personal obsession is espresso - and my business plan practically starts out with stating how big of a revenue-generating industry this is (and I didn’t just find these figures on google.com). Start doing this right away. If you need immediate help and can’t wait for Part II, the link below provides an inexpensive route to assistance in your business plan. I’ve purchased a few of these manuals and have generally been quite pleased. Enjoy.